HOW THE U.S. DEBT ONCE DROPPED TO ZERO
by KC Morgan
If the United States paid off its massive debt today, the media might literally implode on itself. But this moment actually did happen, once. It was announced in the Senate that the U.S. National Debt was $0. That was on Jan. 8, 1835. America hasn’t come anywhere close to paying off its debt since.
When the Revolution ended, the founding fathers chose to pay off the debt America had earned during the war, and they pursued that plan aggressively. First, they consolidated all the debts earned by the states in the country, a sum of about $75 million. That would be a little over $2 billion in today’s money. Legislators worked on paying down the debt, but no one really led the charge on the bills until President Andrew Jackson came along.
He hated debt. Personally, professionally, politically, he was against the idea of owing money. So Jackson made some bold decisions. He began selling land owned by the U.S. government in the western part of the country. A real-estate boom made all land valuable, and Jackson took advantage. The debt was at $58 million when he assumed office, or $1.5 billion today.
In his 1834 State of the Union, Jackson announced that the country would not only be debt-free but have a surplus the next year. He was right. He blocked spending bills, slashed the budget, and even vetoed the national highway program because it was too expensive. And he got rid of all that debt.
Jackson gave the surplus money the U.S. was earning to the states. The banks had too much money and too much power. A year after the books were balanced, the economy crashed. It led to the longest depression in U.S. history. America started to borrow money again during the 6-year depression, adding up a brand-new debt. It was the very last time the country was in the black.
In 1999, Bill Clinton left office with the government earning more money than it was spending. He predicted that the United States would have a zero debt in 16 years. But then the Bush administration took over, the country went to war, and in 2008 the national debt soared to a double-digit trillion-dollar figure for the very first time.
As of Jan. 8, 2015, 180 years to the day after the country reached a balanced budget, the national debt is more than $18 trillion, or $56,485 for every U.S. citizen.
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